Launch next phase of reforms for faster growth, IMF to India

Lima: With India's growth rate projected to drop slightly from 7.5 percent to 7.3 percent in 2015, the IMF today recommended the country to launch next phase of economic reforms and improve its business climate for achieving faster and more inclusive growth.

"In India, while several policy actions have been taken recently, further steps in relaxing longstanding supply bottlenecks, especially in the energy, mining, and power sectors, as well as labour and product market reforms, and improving the business climate are crucial to achieving faster and more inclusive growth," the IMF said.

In its Asia and Pacific Regional Economic Outlook Update released in Peru on the sidelines of the annual fall meeting of the IMF and World Bank, the IMF has projected a slight drop in India's growth rate from 7.5 percent to 7.3 percent in 2015 and maintained the same growth rate of 7.5 percent for 2016 as it projected in this previous report in April.

"GDP is expected to grow at 7.3 percent in 2015 (0.2 percentage points lower than in the 2015 April WEO), rising to 7.5 percent in 2016 (unchanged from the 2015 April WEO)," the report said.

In India, the ongoing economic recovery is underpinned by robust domestic demand.

"With the revival of consumer and business sentiment, the incipient recovery of investment is expected to contribute more to growth going forward," it said.

"In addition, higher public infrastructure investment and government initiatives to unclog raw material linkages and support the lending capacity of Indian banks should help crowd-in private investment," the IMF said.